Top-quality municipal bonds finished mixed on Tuesday, traders said, as the state of Wisconsin came to market with a sale of general obligation bonds and investors awaited the Federal Open Market Committee's decision on interest rates.

Secondary market
The yield on the 10-year benchmark muni general obligation was unchanged from 1.88% on Monday, while the 30-year GO yield increased one basis point to 2.73% from 2.72%, according to he final read of Municipal Market Data's triple-A scale.

U.S. Treasuries were narrowly mixed on Tuesday. The yield on the two-year Treasury was unchanged from 1.36% on Monday, the 10-year Treasury yield slipped to 2.20% from 2.21% while the yield on the 30-year Treasury bond decreased to 2.86% from 2.87%.

The 10-year muni to Treasury ratio was calculated at 85.2% on Tuesday, compared with 85.0% on Monday, while the 30-year muni to Treasury ratio stood at 95.4% versus 94.8%, according to MMD.

MSRB: Previous session's activity
The Municipal Securities Rulemaking Board reported 35,107 trades on Monday on volume of $6.22 billion.

Primary market

Although a handful of deals were priced, the market was relatively quiet, according to a New York trader.

"There are a lot of cross currents right now and you had the Fed meeting tomorrow. I think a lot of people are just waiting for them to do what they are going to do tomorrow," said a New York trader. "Overall, the money continues to flow in and the deals should do well this week."

The Federal Open Market Committee is set to conclude its meeting Wednesday, with most analysts expecting the panel to raise the benchmark interest rate by 0.25%.

The week's municipal bond sales got underway on Tuesday as Bank of America Merrill Lynch priced Wisconsin’s $347.54 million of GO refunding bonds of 2017, Series 1.

The issue was priced to yield from 1.22% with a 5% coupon in 2021 to 1.50% with 5% and 3% coupons in a split 2023 maturity and from 1.96% with a 5% coupon in 2026 to 2.45% with a 5% coupon in 2031.

The deal is rated Aa2 by Moody’s Investors Service and AA by S&P Global Ratings, Fitch Ratings and Kroll Bond Rating Agency.

Since 2007, Wisconsin had sold about $20.99 billion of securities with the most issuance occurring in 2009 when it sold $2.39 billion.

The Badger State has sold more than $1 billion every year for the past decade, with the lowest yearly total coming in 2007 when it sold $1.14 billion. Tuesday’s sale put the state over the $2 billion mark for second year in a row.

JPMorgan Securities priced the New York City Housing Development Corp.’s $272.73 million of Series 2017 C-1 and C-2 multi-family housing revenue sustainable neighborhood bonds.

The $139.23 million of Series 2017 C-1 bonds were priced at par to yield from 1.20% in 2020 to 2.55% in 2028, 3.10% in 2032, 3.45% in 2037, 3.55% in 2042, 3.65% in 2047, 3.75% in 2052 and 3.85% in 2057.

The $133.5 million of Series 2017 C-2 bonds were priced at par to yield 1.70% in 2011.

The deal is rated Aa2 by Moody’s and AA-plus by S&P.

Separately, BAML priced the NYC HDC’s $62.29 million of Series 2017D multi-family housing revenue bonds at par to yield 0.90% in 2047 with a mandatory tender date in 2018 and optional call on Sept. 15. The deal is rated VMIG1 by Moody’s and A1-plus by S&P.

Citigroup priced the California Municipal Finance Authority’s $153.21 million of Series 2017A lease revenue bonds for the Orange County Civic Center infrastructure improvement program’s phase 1.

The issue was priced as 5s to yield from 1.22% in 2021 to 2.93% in 2037; a 2042 maturity was priced as 5s to yield 3.01% and a 2047 maturity was priced as 4s to yield 3.45%.

The deal is rated AA by S&P and Fitch Ratings.

JPMorgan priced Tallahassee, Fla.’s $147.8 million of Series 2017 energy system refunding revenue bonds.

The issue was priced to yield from 0.95% with a 3% coupon in 2018 to 2.90% with a 5% coupon in 2037.

The deal is rated Aa3 by Moody’s and AA by S&P.

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Chip Barnett

Chip Barnett

Chip Barnett is a journalist with more than 40 years of experience. Barnett is currently Senior Market Reporter for The Bond Buyer.
Aaron Weitzman

Aaron Weitzman

Aaron Weitzman is a markets reporter for The Bond Buyer, focusing on the sell side of the municipal bond market.